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Popescu vs Millien Court Opinion

Popescu vs Millien Court Opinion

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Published by Ron Finberg
Court decision in case between directors of Boston Technologies in response to a disagreement between them.
Court decision in case between directors of Boston Technologies in response to a disagreement between them.

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Published by: Ron Finberg on Feb 05, 2014
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03/29/2015

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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
KEVIN MILLIEN,
 
Petitioner,
 
v.
 
GEORGE POPESCU,
 
Respondent.
 
)))))))))
 
C.A. No. 8670-VCN
 
MEMORANDUM OPINION
 Date Submitted: October 10, 2013 Date Decided: January 31, 2014 Francis G.X. Pileggi, Esquire and Jill Agro, Esquire of Eckert Seamans Cherin & Mellott, LLC, Wilmington, Delaware, Attorneys for Petitioner. Kenneth J. Nachbar, Esquire and Bradley D. Sorrels, Esquire of Morris, Nichols, Arsht & Tunnell LLP, Wilmington, Delaware, Attorneys for Respondent.  NOBLE, Vice Chancellor
 
1
I. INTRODUCTION
This action is fundamentally a dispute between two stockholder-directors over the capital structure of their corporation. One contends, based on current stock ownership, that a custodian is necessary to break a director deadlock; the other seeks specific performance of a purported agreement that would effect their intended stock ownership and thus resolve any alleged deadlock. Petitioner
Kevin Millien (“Millien”) filed this action pursuant to 8
 Del. C.
 § 226 against Respondent
George Popescu (“Popescu”) requesting the Court to appoint a custodian to resolve the parties’ deadlock as the
only two directors of Boston Technologies,
Inc. (“BT”).
1
 In response, Popescu filed four counterclaims against Millien: (i) breach of contract; (ii) breach of the implied covenant of good faith and fair dealing; (iii) reformation; and (iv) fraud in the inducement.
2
 This post-trial memorandum opin
ion presents the Court’s findings of fact
and conclusions of law.
3
 For the reasons set forth below, the Court concludes that Popescu is entitled to judgment in his favor for his breach of contract claim and that Millien is not entitled to the appointment of a custodian for BT.
 
1
 
Joint Pretrial Order (“Pre
-
Trial Order”)
§ IV.A; Am. Verified Pet. for the Appointment of a Custodian Pursuant to 8
 Del. C.
 §
226 (“Pet.”)
 ¶¶ 27-33.
2
 Pre-Trial Order §
IV.B; Resp’t’s Answer and Am. Verified Countercl.
 ¶¶ 46-67.
3
 The parties relied on their pre-trial briefs instead of submitting post-trial briefs. The Court heard closing arguments at the conclusion of the trial in lieu of a separate, post-trial oral argument.
 
2
II. THE PARTIES
Millien and Popescu are the current directors of BT.
4
 Millien is
BT’s
 former
Chief Operating Officer (“COO”)
 and
Chief Marketing Officer (“CMO”)
.
5
 Popescu is
BT’s
 current Chief
Executive Officer (“CEO”)
.
6
 Currently, they are the
sole and equal holders of BT’s Class B voting stock (“BT Voting Stock”), with
each owning 63,000,000 shares.
7
 Although not a party in this action, BT is the Delaware corporation whose capital structure is in dispute. BT is headquartered in Boston, Massachusetts and has several offices outside the United States.
8
 It provides software and other services to firms in the foreign exchange market.
9
 Popescu and two associates formed Boston Technologies LLC, the  predecessor to BT, in March 2007 to hold the intellectual property rights for  brokerage software Popescu was writing.
10
 After a co-
founder’s
 particularly flippant comment about his control over the company, Popescu took steps to
4
 Pre-Trial Order ¶ 17.
5
 
 Id.
 ¶ 19.
6
 
 Id.
 ¶ 18.
7
 
 Id.
 ¶ 16.
8
 
 Id.
 ¶¶ 1, 4.
9
 
 Id.
 ¶ 3.
10
 
 Id.
 
 ¶ 1; Trial Tr (“Tr.”) 224
-25.

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